Demand Destruction – US fuel demand reduced by higher prices
August 7, 2022 (LBO) – Fox business news has reported that fuel demand in the United States is declining in response to higher prices.
“New data from the Energy Information Administration (EIA) shows that gas demand dropped from 9.25 million barrels per day to 8.54 million per day last week. That’s 1.24 million barrels per day lower than last year and “in line with demand at the end of July 2020,” when there were widespread virus-related restrictions and fewer people were hitting the road, according to AAA.”
“Despite the steady decrease in pump prices, drivers appear to still be altering their driving habits to contend with higher-than-usual prices,” AAA spokesperson Andrew Gross told FOX Business on Thursday.
Destruction of demand through higher taxes on fuel has been suggested as a way from Sri Lanka to resolve its economic crisis, however local policy makers have failed to take action likely due to political sensitivities.